Russia: The Achilles Heel of Kremlin
written by: Dumitru Minzarari, 29-Sep-08


Russian President Dmitry Medvedev (R) shakes hands with President of Moldova Vladimir Voronin (L) in Sochi on August 25, 2008.
While pundits on both sides of the ocean quarrel over the lack of effective leverages on Moscow, the Western powers must show more conviction if they want to keep Moldova and Ukraine from being the next Georgia.

As always in times of serious crisis the West is striving to assemble its scattered many voices into one organized chorus. To no surprise that is easier to say than to do, because the West is divided into two camps in its dealings with Russia – especially the resurgent Russia of recent years.

The first camp – mostly in “old Europe” – shows repentance over the perceived humiliation of Russia by the West, be it NATO expansion or the claim of failing to treat Russia as an equal partner. They tend to accept Russian officials’ seemingly innocent words and fail to grasp the extent of their hideous goals. The other camp – forged by the former Soviet-bloc states once dominated by Moscow – campaigns for a harsher response.

For their part, Russian policymakers are content to point out that Russia is the one holding all the aces. They happily quote their Western counterparts that the United States needs Russia for solving the emerging challenges of international security, while Europe cannot do without Russian energy resources.

Hands tied?

This has become a self-fulfilling prophecy, since the public debate in the West has been rather rigid and uninventive in discussing the Russian-Western relationship and interdependency.

Russia no less than the West is challenged by the international security problems. Besides, the key to Russia’s power today – its ability to continue accumulating foreign exchange reserves – heavily depends on exploring new hydrocarbon fields, so that it can keep up with the growing foreign energy demands. And Moscow will not suffice in doing this, without considerable investments from the developed states both in cash and technology. However, this remains only theory for a divided and confused West.

Its confusion about Russia is partly explained by the unpredictability of the country’s political system. When foreign and domestic observers see the decisive face of president Dmitry Medvedev, the words he speaks seem to belong to the prime-minister Vladimir Putin, while certain domestic and foreign policy actions of the Kremlin resemble somewhat the dire behavior of the Iranian president Mahmoud Ahmadinejad.

In a way Russia is staging its relations with the West as if they were playing a game of chicken. It studies the Western interests, motives, and patterns of behavior. Then, after preparing the ground with an intense propaganda campaign meant to prove it has nothing to lose, Moscow hits the gas, waiting for the West to yield.

There are few hints as to how to avoid losing in such encounters with Kremlin. For this purpose the West has to learn from Russia. Similarly to how Russian policymakers have found about the Western vulnerabilities to Moscow’s pressures it is necessary to identify the Russia’s center of gravity. Namely, there is a need to find that element in the Russia’s political system that has the centripetal force holding the structure of contemporary Russian state together.

The center of gravity

The Russian political system is built on three pillars, resembling in a way the systemic build-up of the Soviet Union. One pillar is the idea of the Russian state, built on the concept of derjava, meaning a great power with a strong autocratic leader, resembling the authority of the monarch. The membership in the prestigious G-8, the ambition of rivaling at an equal foot with the United States, its veto power in the UN Security Council and the resulting ability to influence the world affairs - these are characteristics of the first pillar. The exercise of these leverages are meant to prove a sought great-power status and presently are aimed at supporting Kremlin’s efforts to wield influence over its former client states which, in practical terms, means preventing them from joining both NATO and European Union. When this is achieved, the goal will logically advance to build control mechanisms over the former Warsaw Pact countries.

The second pillar is Russia’s vast territory, its rich natural resources, and the consolidated perception that this needs to be protected against greedy foreigners. It implies that a large military is needed to defend the land, which contributed to the militarization of Russia at all levels of the society. And it resulted into a mental map of a ‘besieged fortress’ being ingrained into the Russians’ conscious, explaining the opposition to foreign military installations in its vicinity. This in turn has contributed to the tendency of the Russian strategic culture to place between its main territory and a potential rival either neutral or ‘buffer’ states.

The third pillar is the control of the state’s wealth and natural resources by the national elite. It requires, in the thinking of the Russian policymakers, strong, “sovereign” institutions able to provide for national security and project influence abroad. In the contemporary Russia, it takes the form of key decision makers gaining control of the country’s huge resources through monopolistic state enterprises like Gazprom.

By targeting the Russian center of gravity, the West can convince Moscow of its determination and discourage the insane game of chicken that Russia plays using its foreign policy tools.

Besides its firmness, the EU and United States also will need to learn to deconstruct Russian political rhetoric, which often borrows Western terminology while deliberately adopting it for its own purposes. The Kremlin mimicked the White House with its incursion into Georgia, invoking it was defending human rights and preventing genocide in breakaway South Ossetia. It recognized South Ossetia and Abkhazia as independent states this week by declaring it was the will of the people, a throwback to U.S. support of independent Kosovo. In his speech recognizing the independence of the two enclaves, Medvedev taunted the West by hypocritically referring to the UN Charter and the Helsinki Final Act as the basis for this recognition. In reality, Russia’s actions violated the spirit and content of these documents.

Russia and the West speak a different language of foreign policy, determined by their different political systems and values. Understanding and considering these will help to find common ground in addressing Russia’s genuine and perceived insecurities of the second pillar.

The third pillar should be addressed through a carrot-and-stick approach. It involves mostly economics, technology, and innovation. Given the strong interdependence between Russia and the West, the latter should target the personal interests of Russian leaders. These interests are directly tied to the fate of Russian state monopolies. The decline in the Russian stock market and withdrawal of billions of dollars in foreign investment after the invasion of Georgia shows how vulnerable the economy can be.

But mainly the EU and United States should focus on the first pillar. In a way it is the most critical one, because it represents a logical extension of the other two. The new Foreign Policy Concept of the Russian Federation, approved in July 2008 two months after Dmitry Medvedev became president, emphasized that Russia sees relations with the Commonwealth of Independent States as a top priority. The war in Georgia, a country which has sought integration into Euro-Atlantic structures and has distanced itself from the CIS, is unquestionable evidence of this provision.

The Cold War Redux

It is vital that the West prevent what Russia did in Georgia from snowballing into other infringements – perhaps over the Crimea or Transdniester. If this happens, then the price paid to stop Moscow later will be much higher. However it is unlikely that anything effective will be done to discourage further similar actions of Russia. In order to prevent interference from the West, Russia usually uses the tactics of small steps, which implies minor violations of international law, sovereignty and territorial integrity of its former satellites. Through this Kremlin avoids provoking stronger responses from the West. After every such small step Brussels and Washington decide that a minor violation does not deserve degrading the relations with such an important actor like Russia. However, summing up all these small steps brings into light a completely different picture.

The Cold War was characterized by the Soviet disregard of international law, the use of proxy wars to compete for world influence with the United States, and efforts to undermine the authority of the West. That’s not much different than what Russia is doing today.

Nevertheless the aim to control its former satellites is the Achilles’ heel of the Russian Federation, because it considers it a strategic goal, investing into it significant efforts. It is only by denying Russia the power to do this that the West can reverse the revisionist and anti-Western course that the current Russian leadership has taken. Besides depleting Russian resources targeted towards the goal of dominating the former Soviet republics, it will show Moscow the Western determination and credibility. And deterrence only works when based on credible capabilities and will. Otherwise Kremlin could come to the conclusion that NATO might not respond militarily in case Russian tanks roll over the border into Estonian territory.

To prevent the Kremlin from repeating its Georgian actions in other states, the West should first of all make sure Russia will not invade its former satellites, through military and security arrangements and the deployment of “stabilization” or peacekeeping troops that would deter Russia from the use the military option.

Second, the West should assist threatened post-Soviet countries in addressing their systemic vulnerabilities, launching a Marshall Plan type of initiative for Moldova, Ukraine and Georgia. Together with economic and technical assistance, it should bring real and effective pressure mechanisms to persuade the governments of these countries to promote reform and modernization, including education campaigns among their population. This is exactly what Russia tries to prevent: intense involvement of the United States and EU in these countries that would offset Soviet-era regionalism and integrate them into the Euro-Atlantic structures.

By taking these steps, the West will provide fewer opportunities for Russia to violate international law without severe repercussions. And only through playing a leading role in Georgia, Moldova, and Ukraine can the West promote their democratic development and discourage Russia from mounting a new cold war.

The potential for this approach was confirmed on 25 August, when the Russian president suddenly invited Moldovan President Vladimir Voronin to Sochi. It happened a few days after Romanian President Traian Basescu visited Moldova, Ukraine, Azerbaijan, Georgia and Turkey, in a tour to discuss regional security after the Russian invasion of Georgia. This was followed by a call by Ukrainian President Viktor Yushchenko to “unfreeze” the Transdniester conflict. He hinted at the necessity to transform its peacekeeping format, which has no UN mandate and is dominated by Russia, a country which is a part to the conflict.

The main message Medvedev sent to the world during his meeting with the Moldovan president was that the South Ossetian case should be a serious warning to the other regions dealing with ‘frozen conflicts’. It was an obvious warning to prevent Ukraine and Moldova from dismantling the Russian control mechanisms over Transdniester, and to discourage the West from getting involved. Another game of chicken was started by the Kremlin, which now has hit the gas pedal and is waiting for the West to yield again.

It is up to the United States and the EU whether this risky practice of the cold war will take place on the European continent, or if they can manage to persuade Russia of the high and unacceptable consequences of disregarding international law once again.

Dumitru Minzarari is an associate foreign and security policy analyst with the Institute for Development and Social Initiatives, a leading Moldovan think tank.

The final shoe on American consumerism is about to fall

13.10.2008

America's bedraggled, debt slave consumers are about to reap the final whirlwind which will finally unwind what is left of their consumer materialist society. This final shoe will come in the form of the cheaply made and cheap priced and often poisonous Chinese consumer goods. It is these very goods that not only have stuffed American households in a gluttony of soulless, Christless consumerism but have equally driven those same mindless consumers out of their middle class manufacturing jobs and into the lower class that make up the vast vast masses of service sector jobs.

Of course the fact that a service economy is a natural by product of a manufacturing economy is lost on those whose education is now a deteriorating 3rd world joke with a 1st world price tag and who listen to the likes of the Communist News Network (CNN) or Faux News, both corporately owned by a small powerful and government aligned (both parties) oligarchs.

But all that aside, and back to the subject. The Chinese are about to raise prices on consumer goods as they have already raised prices on metal industrial inputs. There are three reasons for this. First is the falling dollar. Turns out, all those pseudo calls to release the Yuan did just that and the Yuan, while still ballasted down not to rise to quickly, has risen 6% against the dollar. So that's 6% so far. Then we have the 9% inflation rate of today's China, which equally raises the prices of inputs (raw materials), work (ok, the Chinese slave wage is a joke so 10% more on a 25 cent per hour pay is still a joke at 27.5 cents) and overhead (paper pushers, electricity, energy in general, rent, etc). Finally, in order to combat an overheated economy, which is obvious from the high inflation rate, China has moved to cut back subsidies to it's industry (that's right all you Free Trade zealot fools, you're the only idiots playing that game, everyone else plays mercantilism...defending their economy). Seems that many of those cuts are up to 20% in nature and the suppliers have tacked that 20% right on to their prices.

So all told, so far, that's about a 30-36% rise in price.

Have not felt that yet? Do not worry, they are working their way up the manufacturing chain, as usual starting with basic inputs and propagating upwards. You will feel it soon enough.

What will an economy, the world's biggest debtor, already under strains of a 7-10% actual inflation rate (vs the 3% marked down liar rate of the Fed) and where consumerism alone makes up 70% of the economy, do?

Well the usual Fed policy of making more money sure as hell won't help the situation.

Good luck, you'll need it.

Stanislav Mishin